Musk wants out, but shareholders approve $54.20-per-share purchase agreement.
Twitter shareholders voted to approve Elon Musk’s purchase of the business, weeks before an effort over Musk’s try to exit the merger deal. Though a particular vote tally wasn’t on the market, multiple news reports said investors backed the Twitter board’s recommendation to approve the $44 billion deal that Musk decided to in April before changing his mind.
“Most Twitter shareholders voted and only accepting Musk’s $54.20-a-share offer to obtain the social-networking company, in accordance with an initial vote count continue reading Tuesday,” Bloomberg wrote.
Today’s shareholder vote was the last remaining approval Twitter necessary for the Musk deal, however the bigger question is exactly what will happen at the upcoming trial at Delaware Court of Chancery. Twitter sued Musk to force him to perform the offer, and an effort is scheduled to begin with on October 17.
Musk owns about 9.2 percent of Twitter stock and wasn’t likely to vote “considering that he’s got alleged that Twitter breached the merger agreement,” The Wall Street Journal wrote. “The agreement requires Mr. Musk to vote his shares and only the offer, though his support isn’t crucial if enough other investors back it.”
Twitter stock was up 0.7 percent today despite a large drop in the entire market. Twitter was at $41.70 at closing, and shareholders would receive $54.20 per share if Musk must complete the purchase.
Today’s “shareholder meeting lasted 7 minutes, with polls open for approximately three minutes,” the Bloomberg article said. “Shareholders may possibly also submit votes for a number of weeks prior to the meeting.” News reports before today’s meeting indicated there have been already enough votes to approve the merger.
Judge criticized Musk before trial
Musk has tried to exit the merger by claiming Twitter lied concerning the amount of spam bots on its service. Musk has repeatedly complained concerning the overall amount of bots on Twitter but hasn’t disproven Twitter’s specific estimate, that is that significantly less than 5 percent of its monetizable daily active users (mDAU) are spam or fake.
Musk lost some key rulings in the pre-trial phase. His try to delay the trial until February 2023 was rejected in July. The other day, Judge Kathaleen McCormick rejected Musk’s newer motion for a four-week delay, writing in her ruling that “even four weeks’ delay would risk further injury to Twitter too great to justify.”
McCormick the other day also criticized Musk for failing woefully to provide documents sought by Twitter, writing that “Musk’s own production of texts revealed glaring deficiencies.” She ordered Musk to create more documents, noting that Twitter “has born[e] the majority of the responsibility of discovery” while “Defendants had less to accomplish but nonetheless fell short within their obligations.”
A Twitter filing made public yesterday said that gaps in Musk’s production of texts “are notable since they correspond precisely to the time when Musk apparently developed buyer’s remorse and set into action his scheme to flee the merger agreement.”
More Musk texts made public
It’s clear that Musk’s document “production was incomplete because other parties have produced messages to and from Musk during this time period period that Musk must have produced,” Twitter wrote. Which includes texts between Musk and Morgan Stanley’s head of global technology investment banking, Michael Grimes, that have been made by Morgan Stanley.
Those messages show that on, may 8, Musk wrote to Grimes he was thinking about exiting the merger agreement because of the chance for “World War III.” In regards to a half hour later, in accordance with Twitter’s newly public filing, Musk wrote to Grimes that “An exceptionally fundamental homework item is understanding just how Twitter confirms that 95% of these daily active users are both real people rather than double-counted.”
“If that number is similar to 50% or lower, that is what I’d guess predicated on my feed, they have already been fundamentally misrepresenting the worthiness of Twitter to advertisers and investors,” Musk wrote to Grimes. “To be super clear, this deal moves forward if it passes homework, but obviously not if you can find massive gaping issues.”
Twitter’s filing said these messages came weeks after Musk “expressly disclaimed any diligence before signing and agreeing to a no-diligence merger.”